Beautiful beaches. Azure skies. Rich history. No doubt, Greece has a lot going for it as a travel destination. But while you’re soaking up the Mediterranean sunshine and taking in the vistas and visiting the Parthenon, ask this about Greece: could you stomach investing in its future?

Right now, investing in the basket case of European basket cases might seem downright tempting to those who think that there’s always a way to beat the herd by running against it – and downright crazy to those who cleave to conventional wisdom.

But sometimes it pays to be contrarian. Anyone who bought the S&P 500, say, in the trough of March 2009 would have felt pretty good about the 300 per cent gain since then. Even if you bought in September 2008, before equity indexes fell off the cliff, you’d still be up about 70 per cent. Not bad, right?

The Athens Stock Exchange General Index (ASE) is down more than 20 per cent over the past year, and since 2010 – the beginning of the drawn-out drama of the Greek debt crisis, which of course is still going on – it’s declined by about 40 per cent. That has occurred while major stock market indexes in the rest of the developed world have done, well, a lot better.

So, in the belief that what comes down must go up, is it time to take a look at Greece?

The question a contrarian investor should be asking is whether the potential reward might justify taking on the risk. For guidance, he might look at Portugal: It is emerging at long last from its own debt crisis, and its stock market has surged more than 25 per cent so far this year.

For Greece, the post-crisis handicapping is already happening in markets. The ASE has remained remarkably stable this year, given all the crummy news, as investors price in the likelihood of the left-wing government reaching an agreement with its creditors to extend emergency financing. This week seems to be make-or-break time for the negotiations, and investors are paying attention. Yesterday, on the whiff of a rumour that a deal was in the works (later denied by some government officials), the ASE rebounded by 1.6 per cent.

You can expect more volatility as the crisis continues to unfold, especially since there’s no clear solution to it. Last week, Greece tapped a special IMF reserve account to make a payment to one of its creditors – ironically, the IMF itself. Now that that particular cupboard is bare, and Greek officials have admitted that the country is (yet again) perilously close to running out of money altogether. The only way it can keep paying its bills – not just interest payments, but also salaries to civil servants and outlays to pensioners – is to free up more bailout money.

Meanwhile, Greek Prime Minister Alex Tsipras continues to talk tough as negotiations continue, saying he will under no circumstances agree to a deal that means more cuts to wages or pensions. The EU, on the other hand, shows few signs of backing down on its demands for continuing austerity measures and better visibility into the Greek government’s finances, which are infamously opaque.

This is largely gamesmanship, of course, and what really matters to investors is how the thing will end. Short of the worst-case outcome (a Grexit from the European Union) or the best-case outcome (a deal), a third possibility is that Greece remains in the eurozone but its economic situation becomes so untenable that the government defaults not just to creditors, but also to the folks at home – which would make the Tsipras government’s political position untenable.

For Europe, this might not be such a bad outcome, as it could lead to a referendum or an election that may remove a big irritant. For Greece, it could lead to a new government with an actually achievable mandate, or even the same government with a new mandate. Either way, the EU and IMF get another kick at the negotiating can, and Greece will buy itself more time. If there’s a deal or a change in government, we can expect a runup in stock prices.

But would it be likely to last? Maybe not. In reality, over the long term, it will likely be a very long road back to 2010 for the Greek economy and Greek equities. Any resolution to the current crisis will involve even more austerity, and it will take time – a lot of it – for any positive impacts of reform to offset the negatives of government cutbacks to spending. Greece has already slipped back into recession this year, and more austerity could make it worse, at least in the short term.

Another cause for pause is simply the size of Greece’s debt obligations. If it can successfully unlock the last $7 billion in bailout funds, it will end up owing 240-billion euros in emergency loans. Sure, Portugal, which has roughly the same size economy, is paying back its European creditors, but it owed them “only” 78-billion euros – and its debt-to-GDP is still 130 per cent. Greek debt-to-GDP is 180 per cent.

The takeaway is that investors can reasonably expect a lot more pain before they see much gain from Greek stocks. For now, they might want to enjoy the beaches and the water, and leave it at that.